Answer<\/span><\/summary>\nAnswer: (a) Inventory Turnover Ratio and Working Capital Turnover Ratio<\/p>\n<\/details>\n
\nQuestion 2. \nAcid Test ratio comes under: \n(a) Liquidity ratio \n(b) Solvency ratio \n(c) Profitability ratio \n(d) Activity ratio<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: (a) Liquidity ratio<\/p>\n<\/details>\n
\nQuestion 3. \nCurrent assets are those assets which are convertible into cash within: \n(a) One month \n(b) 6 months \n(c) 12 months \n(d) none of these<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: (c) 12 months<\/p>\n<\/details>\n
\nQuestion 4. \nWhich of the following is not considered in the ratio analysis as per guidance notes? \n(a) Fixed Assets \n(b) Share capital \n(c) Other Non-current Assets \n(d) Non-current Assets<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: (c) Other Non-current Assets<\/p>\n<\/details>\n
\nQuestion 5. \nWhich of the following will increase the current ratio where it is 2 : 1 ? \n(a) Payment to creditors \n(b) Conversions of receivables into cash \n(c) Purchase of goods on credit \n(d) Purchase of goods for cash<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: (a) Payment to creditors<\/p>\n<\/details>\n
\nQuestion 6. \nLong term solvency ratio is judged by which of the following ratio? \n(a) Debt equity ratio \n(b) Total assets turnover ratio \n(c) Liquidity ratios \n(d) Operating ratio<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: (c) Liquidity ratios<\/p>\n<\/details>\n
\nQuestion 7. \nWhich of the following ratios provide solvency position of a business in the long run? \n(a) Liquidity Ratios \n(b) Solvency ratios \n(c) Profitability ratios \n(d) Turnover ratios<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: (b) Solvency ratios<\/p>\n<\/details>\n
\nQuestion 8. \nIn debt equity ratio, debt refers to \n(a) Short term debts \n(b) Total debts \n(c) Shareholders\u2019funds \n(d) Long term borrowings and long term debts<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: (d) Long term borrowings and long term debts<\/p>\n<\/details>\n
\nQuestion 9. \nWhich of the following transactions will increase debt equity ratio which is 1 : 2? \n(a) Issue of shares for cash \n(b) Redemption of preference shares \n(c) Redemption of debentures \n(d) Conversion of debentures into shares<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: (b) Redemption of preference shares<\/p>\n<\/details>\n
\nQuestion 10. \nInterest coverage is equal to \n(a) Interest after interest but before tax \/ interest on debt \n(b) Interest before interest and tax \/ interest on debt \n(c) Interest after interest and debt \/ interest on debt \n(d) Interest on debt \/ Interest before interest and tax<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: (b) Interest before interest and tax \/ interest on debt<\/p>\n<\/details>\n
\nQuestion 11. \nCost of revenue from operations is the difference between \n(a) Revenue from operations + Gross Profit \n(b) Revenue from operations – Gross Profit \n(c) Revenue from operations – Net profit \n(d) Revenue from operations + Net Profit<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: (b) Revenue from operations – Gross Profit<\/p>\n<\/details>\n
\nState whether the following statements are true or false:<\/span><\/p>\nQuestion 12. \nIssue of bonus shares will decrease the debt equity ratio.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: False<\/p>\n<\/details>\n
\nQuestion 13. \nBuying of goods for cash will decrease current ratio.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: False<\/p>\n<\/details>\n
\nQuestion 14. \nFor calculating return on capital employed, net profit before interest is taken.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: True<\/p>\n<\/details>\n
\nQuestion 15. \nPurchase of goods on credit will not change the current ratio.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: False<\/p>\n<\/details>\n
\nQuestion 16. \nWorking capital and net working capital are assumed to be one and same thing.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: True<\/p>\n<\/details>\n
\nQuestion 17. \nPurchase of stock on credit will not affect quick ratio.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: False<\/p>\n<\/details>\n
\nQuestion 18. \nThe excess of revenue from operation over cost of revenue from operation is known as net profit.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: False<\/p>\n<\/details>\n
\nQuestion 19. \nConversion of debentures into equity results in decrease in debt equity ratio in case debt equity ratio is 1 : 2.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: True<\/p>\n<\/details>\n
\nQuestion 20. \nPurchase of stock will decrease the inventory turnover ratio.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: True<\/p>\n<\/details>\n
\nQuestion 21. \nOperating cost + operating profit = revenue from operations.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: True<\/p>\n<\/details>\n
\nFill in the blanks with correct word:<\/span><\/p>\nQuestion 22. \nThe ______ ratios are primarily measure of return.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: Profitability<\/p>\n<\/details>\n
\nQuestion 23. \nThe ________ of a company is measured by its ability to pay short-term liabilities.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: Liquidity<\/p>\n<\/details>\n
\nQuestion 24. \n_______ ratios are those ratios through which speed of various accounts converted into cash is measured.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: Activity<\/p>\n<\/details>\n
\nQuestion 25. \n______ are interested in the average collection period.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: creditors\/receivables<\/p>\n<\/details>\n
\nQuestion 26. \nWhile calculating current ratio, ________ are excluded from the list of current assets.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: loose tools and spares<\/p>\n<\/details>\n
\nQuestion 27. \nWhile calculating working capital ratio, ________ is included in the current assets.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: loose tools and spares<\/p>\n<\/details>\n
\nQuestion 28. \nUnder net profit ratio, normally net profit is ______ taken.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: net profit after tax<\/p>\n<\/details>\n
\nQuestion 29. \nOperating ratio + operating ratio = ________.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: 100<\/p>\n<\/details>\n
\nQuestion 30. \nWhile calculating current ratio, trade receivables should be taken _______ (after \/ before) deducting provision for doubtful debts.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: after<\/p>\n<\/details>\n
\nQuestion 31. \nWhile calculating working capital turnover ratio, trade receivables should be taken _______ (after \/ before) deducting provision for doubtful debts.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: before<\/p>\n<\/details>\n
\nOne word Questions:<\/span><\/p>\nQuestion 32. \nWhat will be the effect on current ratio if a bills payable is discharged on maturity? (CBSE SP 2019-20)<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: The current ratio will increase<\/p>\n<\/details>\n
\nQuestion 33. \nDebt Equity Ratio of a company is 1:2. Purchase of a Fixed asset for \u20b9 5,00,000 on long term deferred payment basis will increase, decrease or not change the ratio?<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: Increased<\/p>\n<\/details>\n
\nQuestion 34. \nIt is a simple arithmetical expression of relationship between two figures. Name the term.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: Ratio<\/p>\n<\/details>\n
\nQuestion 35. \nThe liquidity of a business firm is measured by its ability to satisfy its long-term obligations as they become due. Name a ratio used for this purpose.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: Current Ratio.<\/p>\n<\/details>\n
\nQuestion 36. \nX Ltd. has a Debt-Equity Ratio at 3 : 1. According to the management it should be maintained at 1 : 1. What is the choice to do so?<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: To increase the equity or reduce the debt.<\/p>\n<\/details>\n
\nQuestion 37. \nHow the solvency of a business is assessed by Financial Statement Analysis? (CBSE Delhi 2012).<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: With the help of solvency ratios<\/p>\n<\/details>\n
\nQuestion 38. \nAssuming that the debt to equity ratio is 1 : 2, state giving reason, whether the ratio will improve, decline or will have no change in case equity shares are issued for cash. (CBSE Foreign 2006)<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: Decrease.<\/p>\n<\/details>\n
\nQuestion 39. \nDebt to equity ratio of a company is 08 : 1. State whether long term loan obtained by the company will increase, decrease or not change the ratio. (CBSE Outside Delhi 2008)<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: Increase.<\/p>\n<\/details>\n
\nQuestion 40. \nInventory Turnover ratio of a company is 3 times. State, giving reason, whether the ratio improve, decline or do not change because of increase in the value of closing stock by \u20b9 5,000. (CBSE Outside Delhi 2008)<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: Decrease.<\/p>\n<\/details>\n
\nQuestion 41. \nTrade Receivables Turnover Ratio of a company is 6 times. State with reason whether the ratio will improve, decrease or not change due to increase in the value of closing inventory by \u20b9 50,000. (CBSE Foreign 2008)<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: No change.<\/p>\n<\/details>\n
\nQuestion 42. \nIf a company has earned \u20b9 10,00,000 as profit before interest and tax, ROI is 20%. State the capital employed in the company.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: \u20b9 5,00,000 \n <\/p>\n<\/details>\n
\nQuestion 43. \nWhat will be operating profit if operating ratio is 88.94? (CBSE Delhi 2009)<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: Operating Profit = 100 – 88.94 = 11.06<\/p>\n<\/details>\n
\nQuestion 44. \nState with reason whether repayment of long-term loan will result in increase, decrease or no change of debt-equity ratio. (CBSE Outside Delhi 2010 Compt.)<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: Decrease.<\/p>\n<\/details>\n
\nQuestion 45. \nA company has Share Capital of \u20b9 5,00,000, Reserves and Surplus of \u20b9 2,00,000 and Debt Equity Ratio of 1.8 : 1. It has issued additional Share Capital of \u20b9 2,00,000 for cash and bonus shares of \u20b9 1,00,000. What will be new Debt Equity Ratio? \nAns.<\/p>\n\nAnswer<\/span><\/summary>\nAnswer: 1,4 : 1<\/p>\n<\/details>\n
\nUse the above-provided NCERT MCQ Questions for Class 12 Accountancy Chapter 10 Accounting Ratios with Answers Pdf free download and get a good grip on the fundamentals. Need any support from our end during the preparation of CBSE Class 12 Accountancy Accounting Ratios MCQs Multiple Choice Questions with Answers then leave your comments below. We’ll revert back to you soon.<\/p>\n","protected":false},"excerpt":{"rendered":"
Students who are searching for NCERT MCQ Questions for Chapter 10 Accounting Ratios with Answers Pdf free download are compiled here to get good practice on all fundamentals. Know your preparation level on MCQ Questions for Class 12 Accountancy with Answers. You can also verify your answers from our provided Accounting Ratios Class 12 MCQs …<\/p>\n
MCQ Questions for Class 12 Accountancy Chapter 10 Accounting Ratios with Answers<\/span> Read More »<\/a><\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"default","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","spay_email":""},"categories":[35],"tags":[],"yoast_head":"\nMCQ Questions for Class 12 Accountancy Chapter 10 Accounting Ratios with Answers - MCQ Questions<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n